Page 62 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT

Unit 3: Customer Accommodation

 Financial bonds – through favourable pricing and incentives; Notes
 Social bonds – by way of personal and enduring relationships;
 Customization bonds – through mass customization, feed forward and anticipation;
 Structural bonds – joint involvement and integrated systems.



Caselet Square D Co.

t Square D Co., a Palatine, Illinois-based manufacturer of electrical control products
and unit of Paris-based Schneider Electric, VP of Marketing Chris Curtis
Aenthusiastically promotes Square D’s marketing approach toward its strategic
accounts. These accounts, such as Daimler- Chrysler and IBM Cop., are high profile and
generate significant sales. Square D uses a Relationship Management Process or RMP to
market its products to these accounts. RMP stresses creating one-to-one marketing
partnerships in which Square D customers are provided with exactly the products and
level of service they want.
For example, Scott Chakmak is Square D’s director of strategic accounts-DaimlerChrysler
and spends his working days in DaimlerChrysler’s Kenosha, Wisconsin, plant. This
proximity to the customer allows Square D’s sales staff to become well acquainted with
DaimlerChrysler’s needs. Prior to Daimler’s acquisition of Chrysler, Mr. Chakmak realized
that Square D’s team could ease the workload of Chrysler’s engineers by helping with the
design of a new engine assembly line. He suggested that his team oversee the design of
the electrical control system of each machine to ensure conformity. The consistency of the
design would reduce training time and make Chrysler’s employees more versatile. After
more than 2 years, Chrysler finally agreed to Square D’s proposal and put its supplier in
charge of the project. Communicating via the Internet with more than 80 other contributing
suppliers around the world, Square D completed the project in 27 months, significantly
shorter than the industry standard of 36 months, according to Mr. Chakmak. Since that
first project, Square D has overseen similar projects for various DaimlerChrysler plants
around the world. “The first project took 2 years to sell,” recalls Mr. Chakmak. “It took 9
months to sell the next time.”
Then it was 30 days. Since then, it’s basically been a handshake. Ultimately, RMP is about
customer segmentation. If customers don’t want or require value-added services, Square
D simply sells them the products they need. For other customers, value-added services can
be customized to meet their specific product needs. These extra efforts can be quite
worthwhile for Square D, enhancing its value as a supplier to a strategic customer.
For example, Square D is now the sole supplier of power supply equipment to IBM Cop.
Square D must adhere to rigorous standards in handling strategic accounts. Square D and
its sister Schneider brand, Modicon, sell to IBM approximately $I I million in electrical
control products annually under a 3-year pact signed last year. This pact ensures that IBM
receives volume discounting, standardization across plants, prompt shipping, available
inventory for essential products, and responsive service. Mr. Curtis sums up Square D’s
RMP approach as an evolution of the total quality management movement of the 1980s.
Instead of the manufacturing process, RMP scrutinizes Square D’s relationship with its
customers to better accommodate individual requirements and improve channel success.
Source: Scan Callahan, “Getting a Square Deal: Advertising Age’s Business Marketing”, January/February
2000, p. 315

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